Wemyss sees growth despite disruption

THE Wemyss Development Company, the historic family business with interests in property, agriculture, spirits, wine and renewables, has seen profits jump by 28% - in spite of unrest in the Middle East disrupting its tea operation in Kenya.

Wemyss, which is on track to open its first distillery, at Kingsbarns in Fife, by the late autumn, booked pre-tax profits of £8.44 million for year to March 31, 2013.

A surge in turnover to £31.7m from £27.3m the year before included a sales rise to £23.3m in Africa, up from £19.7m in 2012. This came in spite of tea prices being depressed by drought in Sudan, political strife in the Middle East and a foreign exchange crisis in Pakistan.

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Wemyss, which entered the whisky blending market in 2005, said it had invested in stocks for its vintage malts over the year. The directors also revealed it has staged talks with "various parties" over investing in bonded warehouses.

The company took over the £3m Kingsbarns distillery project from founder Doug Clement last year after the golf caddy secured a £670,000 grant from the Scottish Government. Work on the project started in May with a spokeswoman stating that Wemyss hopes its interior, including a visitor centre and cafe, will be completed over the summer.

The company, which is developing the project through subsidiary Wemyss Distillery Limited, is due to take delivery of the stills in September, following a two-year waiting list.

The delay reflects the level of demand from distillers looking to expand production to meet growing interest in whisky around the world.

Wemyss, which has ordered the stills from Forsyths of Rothes, hopes the first spirit will be flowing from the stills by St Andrew's Day.

Mr Clement is a director of Kingsbarns and is expected to run the tours at the distillery when it opens.

Abbreviated accounts for The Kingsbarns Company of Distillers, a subsidiary of Wemyss Distillery, shows the company made a loss after tax of £74,545 for the year ended March 31, with net liabilities of £51,983. The Wemyss Development Company provides the day to day working capital for the business.

Despite the profile of its whisky activities, Wemyss's main interest in the UK is property, including residential developments in prime sites in Glasgow and Edinburgh.

In accounts newly available at Companies House, which show that turnover from the firm's European division rose to £5.64m from £5.27m in 2012, the directors said: "Management are increasingly focused on growing the business related to the development and refurbishment of units for sale. Management continues to spend considerable time and resources identifying high- level opportunities for future developments."

Elsewhere, Wemyss reported a satisfactory performance of the hydroelectric power business it acquired in 2011.

The directors highlighted the company's appetite to grow its presence in the UK renewables sector, noting it had identified a number of hydro sites it hopes to roll out in the years ahead. But they said a lack of bank funding is likely to dictate it will fund such projects itself.

Outside the UK, Wemyss is focused on agriculture. In addition to its tea operation in Kenya, it has farming interests in Australia, where "adverse weather" had led to a "disappointing" year. The directors said: "The issue regarding the exports of live sheep to the Middle East remains unresolved and as such lamb prices remain depressed." However, a "bumper crop and high global prices" led to a strong showing by the group's avocado business. The directors said plans were underway to expand the operation with a major planting programme on a mothballed vineyard, adding: "Some of these expansion costs will be met internally but a significant investment has been made by the parent company post year-end and further remittances will have to be made."

Wemyss's accounts show turnover in Australia fell to £2.76m from £2.99m the year before.

In France, they said the performance of its vineyard business had been "solid if unspectacular".

Wemyss saw its average headcount fall to 2709 from 2978 over the year, as staff costs rose to £5.52m from £5.41m. Directors' remuneration was booked at £272,732, up from £280,805, with the highest-paid receiving a package worth £114.672. An ordinary dividend of £150,000 was paid during the year.

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